UPDATE 2: I've recieved a lot of hate for this, and looking at it again a few months later all the wiser and with half of my sanity lost, I want to apologise. A lot of things I wrote in this have outtdated views, and while I no longer respect most of them, you can if you want. But you don't have to. I'm just saying you can. :D

DISCLAIMER
I, Captain Green of the Colour Coordinated Networking YouTubers and leader of Unplugged Productions, hereby apologise on behalf of my co-workers and employees if this rant is found offensive in any way. Reader discretion is advised.

Before you start reading I want you to know that this is simply MY OPINION AND PERSPECTIVE and nothing else. If you disagree, disagree in a non-aggavating or offensive way, because I've had enough of being flamed. You don't know the rela me, so I will go all out.

Some days I think to myself, 'wow, that skin is great' and other times 'how has this got 200 diamonds?', and now it's time to take out my anger. On my keyboard. Whoops, just broke the closing bracket key.

Don't worry, I can hear your tiny mind thinking: 'Well, what makes a good skin then?' The answer is...

Well, its not as simple as giving a straight answer.

A successful skin usually relies on what used to be 3 elements, but with the addition of the 1.8 skin system, now relies on four. Or five if you're like me.
EDIT: A skin can still succeed without these factors, but, yeah, that's kinda rare. And these are not forcibly STEPS, just INFORMATION.

ELEMENT 1: Placement.
FYI: This blog is going to be a tutorial as well. If you want it to be.
Placement is the actual location of each pixel on the skin. One major placement factor is eyes. With the normal 'Steve-style' eyes, most would place them at the same level as Steve's, but the generic pro out there knows that the eyes should lack a nose, alowing the mouth to be on the bottom layer of the face, and the eyes two pixels above that, leaving space for eyebrows/lashes.
When going for a more youthful look, the males tend to have their eyes two pixels above the bottom of the face, while females only have their eyes one pixel from the bottom.
These styles are adoptive and used (a lot) so use with caution. Or you could try something totally diferrent.

ELEMENT 2: Shading.
I'll bet you saw this one coming. The way shading works now is TOTALLY diferrent from the way it used to be. First it didn't matter, then it just had to be light in the middle, then we reach common era, where skins are either good because they have complex shading (will get to in a sec) or the guy who made it is really popular. Like, disgustingly popular. Nowadays (yes, that IS one word) people want skins that show off the individual muscles in disgusting detail, with perfect highlights, and accurate face details, when there's still people trying to get popular off skins with 50 layers of grey noise on them for shading. 

ELEMENT 3: Hue shifting.
(a sec has passed)
Ah, hue shifting. Something I can't do, most can't do, can't be taught and if you can, you're gifted.
Hue shifting makes a part of the skin change hue slightly as it gets darker or lighter, hence the name, hue shifting. Sometimes it is subtle, but makes a hell of a difference.
Some people try to teach it, and do an alright job of teaching, but the people who read and *ahem* "learn" from it don't really learn anything at all. Overall, hue shifting is hard, so don't try it. Your brain will melt, and ooze out of your ears onto the floor, where your dog will eat it.
EDIT: I wrote "Overall, hue shifting is hard, so don't try it.". This is incorrect, give it a go if you want, but if you are still trying to grip the concept of shading, back OFF.

ELEMENT 4: THREEEEE-DEEEEE!!!
3D elements of a skin are hard enough on the face, to make hair more extravagant, to make hats more... strange... and, well, now they're harder.
With the implemetation of the 1.8 skin system, 3D parts are now availabale on all parts of the body, and that makes it harder for skin authors to make successful skins.

ELEMENT 5: (personal) Usefulness/functionality.
Have you ever found a skin that looks way awesome, but you'd never wear it? yeah, that's not useful or functional, but heck, it still gets popular. There are some skins that you just wish were more humane, more functional, more wearable, more...
You get the picture.
But some skins are just people showing off what they can do with pixel art, and therefore you might favourite, dimaond and comment on their submission, but you never download it.

See, for a skin to be popular-to me at least-is not views, not diamonds, not favourites, its downloads and comments. If someone comments on one of my submissions, I check the comment within an hour, because whether its positive or negative feedback, a congratualtions, or even something non-constructive, it's still nice to know that someone out there was human enough to say something.
Downloads. Frankly, you know that if a skin has a lot of downloads you've hit the mother load. If a skin is downloaded, you know someone has put the file on their computer, changed their skin or someone else has changed their skin, and may be wearing it while you speak.

All in all, popularity isn't about how many pixelated and very oddly-shaped diamonds you got on a submission, but how many people want more.
Subscriptions are a way to measure that. 'Nuff said.

I'll see myself out.